Feature

Drilling for Value at National Oilwell Varco

A split-up of the offshore-rig company this year could unlock value. Shares have 30% upside.

Over the past decade, National Oilwell Varco's stock price has multiplied from $10 and change to a recent $79. But during the past two years, the shares have trailed, rising just 14% while the Standard & Poor's 500 index has surged 43%. The company holds a dominant share of the market for key offshore-drilling gear, where demand has been fierce, but investors fear a looming peak for orders, giving way to the soft conditions now seen in U.S. land drilling, where rig counts have dropped.